Flow Control - Jan 2012
trendlines Demand for industrial controls in China is projected to rise 136 percent annually through 2015 to 259 billion yuan according to a report by the Freedonia Group freedoniagroup com Gains will be supported by increases in durable goods output as well as by expanding investment in key industries such as chemicals utilities and construction Demand growth will also be aided by continuing product development and technological advances in solidstate controls that will enable end users to improve their productivity However gains are expected to be restrained by competition from personal computers programmed to perform control related functions Demand for advanced control products is expected to continue to rise faster than demand for conventional controls as advanced types provide superior performance and production capabilities according to Freedonia As these products become more technologically intricate Freedonia predicts demand for systems integration services and industrial control software Industrial Control Demand in China billion yuan will grow rapidly Adjustable speed drive controls will remain the largest advanced industrial control product segment primarily bolstered by the superior energy conservation performance they provide Demand for special purpose controls is expected to continue to outpace that for general purpose products through 2015 benefiting from the application specific nature of these devices that allows them to sell at higher prices than general purpose controls Durable goods industries accounted for the largest share of demand in 2010 making up 78 percent of the total Industrial controls are especially utilized by electrical and electronic equipment and machinery manufacturers according to Freedonia Original equipment manufacturer OEM applications are expected to provide better prospects for growth than maintenance repair operations MRO applications benefiting from solid advances in durable goods manufacturing output in China Electrical and electronic equipment is expected to be the fastest growing market for industrial controls through 2015 supported by strong increases in manufacturing output as well as rising use of control devices in electrical and electronic equipment Global revenues from PLCs programmable logic controllers in 2010 were nearly 30 percent higher than in 2009 reaching an estimated 82 billion USD according to IMS Researchs imsresearch com report The World Market for PLCs 2011 Edition The recovery from the downturn happened much earlier than expected according to the report Most PLC suppliers had been pessimistic on their future business after the economic crisis of 2009 and thought their business would not recover to the level of 2008 until 2013 However their business was back on track three years earlier than they had expected in some countries in developing regions such as China and India revenues had grown even in 2009 Although the recovery was unexpected it is not hard to explain said Alex Hong market research analyst in IMS Researchs industrial factory automation group in a prepared statement The demand for automation products in many ongoing projects stagnated when investment funding dried up in the economic downturn However government economic stimulus in several countries helped to make money more available at different levels of industry The customers for PLC manufacturers mostly builders or users of industrial machinery had more access to funding to purchase more PLCs and other automation products to continue with their projects according to IMS Research Both the restart of projects discontinued in 2009 and the start of new ones contributed to the high growth of the PLC market in 2010 Global PLC revenues have remained high in 2011 although at a lower rate than in 2010 according to IMS Research However the industrial markets differed by region In Europe despite the continuing and worsening Eurozone sovereign debt crisis the most important market for industrial automation products Germany continued to grow at a healthy rate In the Americas large projects from some end users and growing domestic demand enabled the PLC market to grow though the market in Latin Americas is still underdeveloped In Asia the markets in the growing economies of China and India have performed quite well though that of Japan was hit by the consequences of the earthquake earlier in the year In general the growth of the global economy in 2011 underpinned the global growth of the PC market The report shows PLC suppliers and their industrial customers are currently very uncertain whether growth will continue into 2012 considering the risks to the world economy Many factors such as Europes unresolved sovereign debt crisis tightening economic policy in China and the consequences of the earthquake in Japan and the recent floods in Thailand are affecting the market However IMS Research believes that the PLC market will still grow in 2012 mainly because many large and important PLC markets such as Germany France China and the United States are still performing well at the turn of the year In addition emerging markets such as Brazil and India which already account for half the entire PLC market will be the main driving force for future growth Industrial Controls in China to Reach 259 Bil Yuan in 2015 Global PLC Market Sees Early Recovery With 30 Growth Annual Growth Item 2005 2010 2015 2005 2010 2010 2015 Industrial Control Demand 574 1368 2590 190 136 Advanced 326 795 1520 195 138 Conventional 248 573 1070 182 133 Source The Freedonia Group Inc www FlowControlNetwork com January 2012 11
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